India to rope in private sector to promote social safety schemes

Aiming to provide effective social security to citizens, the Finance Ministry is proposing to rope in private sector insurance companies in promoting a host of initiatives recently announced in the Budget 2015-16.

As private sector banks participated in Pradhan Mantri Jan Dhan Yojana, similar interest is expected in the insurance and pension schemes announced in the Budget 2015-16, he said.Pradhan Mantri Suraksha Bima Yojna would be administered by public sector general insurance companies while Pradhan Mantri Jeevan Jyoti Bima Yojana to be looked after by LIC to begin with.

“The beauty of these low premium products is that it is very simple and no other document is required except Aadhar. All those having a bank account can buy these products and secure their themselves against life and accidental risk,” he said.

“All citizens can subscribe to these schemes by paying full premium. The objective is to create safety net for the society and enable India to become a pensioned society,” he said.

The soon-to-be-launched Pradhan Mantri Suraksha Bima Yojna will cover accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year.

Life insurance scheme, Pradhan Mantri Jeevan Jyoti Bima Yojana will cover both natural and accidental death risk of Rs 2 lakhs just at a premium of Rs 330 per year, or less than one rupee per day, for the age group 18-50.

Similarly, the budget has announced Atal Pension Yojana, a defined pension scheme. Total corpus would depend on the contribution and its period.

To encourage people to join this scheme, he said the Government will contribute 50 per cent of the beneficiaries’ premium limited to Rs 1,000 each year for five years in the new accounts opened before December 31, 2015.

Under the APY, the subscriber would receive the fixed pension of Rs 1,000 per month, Rs 2,000 per month, Rs 3,000 per month, Rs 4,000 per month and Rs 5,000 per month at the age of 60 years depending on their contributions which would vary at the age of joining, he said.

The minimum age of joining APY is 18 years and maximum age would be 40 years, he said, adding, therefore, minimum period of contribution by the subscriber under APY would be 20 years.